Credit unions are facing a succession crisis; as an older generation of credit union directors heads toward retirement, there’s an absence of younger directors who can take their place. Boards of directors are overwhelmingly older, according to a report on U.S. credit union boards called “Effective Credit Union Board Succession Planning” by George Hofheimer of the Filene Research Institute. As boards target younger demographics to expand their membership, representatives at the board level are key to providing insights that target these markets. The sooner boards begin to recruit younger directors, the better prepared and experienced they will be as senior directors retire.
Many credit unions are implementing strategies to attract younger talent, but how can credit unions engage and retain younger directors once they’ve been elected to the position? On the Aprio Blog, a leading board portal vendor offers some advice for on boarding new directors:
1. Mentoring – Partner up new recruits with a veteran director who can brief them on the organization’s strategic priorities, challenges, risks, and future decisions. A mentoring system is often more effective as new recruits may find it easier to ask a peer for help than the chair.
2. Good Governance – Executives have a responsibility to reinforce the organization’s commitment to good governance, stressing to new directors the importance of privacy, confidentiality, and protecting the organization’s decisions. Administrators have a responsibility to show new directors how to communicate according to principles of good governance. Board portals like Aprio that offer superior security are great technological tools that make it easier for directors to adequately protect the credit union’s documents and strategies.
3. Open Access – New directors should have access to the board’s history and its previous challenges. An accurate, accessible archive of past minutes and decisions are transparent and accessible, especially when it’s accessible digitally.
4. Orientation – Once new directors are familiar with procedures and their role, it’s equally important that they can comfortably and confidently use the technology. This is where a board portal vendor like Aprio can step in with ongoing director orientation. As digital natives, younger directors largely won’t have any trouble adapting to technology that promotes remote work and easier access to information. However, having the board portal vendor train directors in one-on-one scenarios, using a checklist to cover all of the portal’s assets, means there is no room for confusion.
Homogenous boards can create a disconnect between a credit union’s members and those guiding the organization. More diverse boards, including younger directors, can better serve the needs of credit unions with diverse members. As the corporate business world begins to recruit younger directors, competition for younger board members will only increase. It’s clear that the next generation needs a seat at the table for credit unions to thrive and face the challenge of millennial membership. Credit union boards need a strong mentorship system, open access to their past decisions and challenges, a strong commitment to the principles of good governance, and an effective orientation system. With those in place, credit unions can look toward the future.